Property Valuations.

Dáil Éireann Debate, Wednesday - 10 March 2010

Wednesday, 10 March 2010

Ceisteanna (97)

Joan Burton

Ceist:

128 Deputy Joan Burton asked the Minister for Finance his views on reports that commercial landlords are maintaining rents at unrealistically high levels, and even increasing them further, in order to flatter both the yield and value of the property in advance of the transfer of loans to the National Asset Management Agency where the property in question forms part of the collateral for such loans; his further views on whether such landlords may opt to leave properties or units vacant rather than accept a lower rent revenue which may have a knock-on impact on the yield and book value of the property; and if he will make a statement on the matter. [11664/10]

Freagraí scríofa

Minister for Finance (Deputy Brian Lenihan)

Any attempt by landlords to inflate the value of their property by seeking to impose unsustainable rent increases on tenants will have no impact on the valuation placed on such property by NAMA. NAMA will purchase land and development loans and investment loans from participating credit institutions. The valuation of investment loans will incorporate assumptions about rental receipts likely to be realised on the underlying properties. However, NAMA's valuation experts, in reviewing those assumptions, must be satisfied that the rental projections are realistic and sustainable given prospective market conditions. They will not accept optimistic projections, supplied by participating institutions or by debtors, which have little prospect of being realised in the foreseeable future.